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10 tips for implementing shared services

Shared services are being applied to an increasing number of
functions. Human resources, IT, and finance were some of the first
areas where shared services commonly were implemented. Now sales
operations, supply chain operations, and marketing are taking
advantage of shared-services platforms.

While the usual benefits of shared-services implementation—cutting
costs and centralizing operations—are obvious, Ravichandran “Ravi”
Venkataraman, CGMA, senior vice president and head of the Global
Services Division at Hewlett-Packard, said people fully start to
understand the benefits when they consider the effects that
standardizing processes might have.

A global company, for example, might have different processes for the
same work in different regions. Shared-services implementation could
help a company standardize processes and technology platforms in every
region, making it easier for executives to connect the dots across the
organization. Such an implementation could also lead to a more rapid
rollout of policies, creation of value-added services, and better
controls.

Indeed, moving to shared services does have consequences that need to
be considered. Individual business units give up freedom; bureaucracy
is increased as policies are centralized; and a personal touch is lost
as functions are moved to locations that sometimes are halfway around
the world, Venkataraman said. Also, regulations can change quickly
across multiple jurisdictions.

And if an organization is not careful in how it structures the
retained portion of the function that moves to shared services,
critical local domain expertise can be lost.

Create a road map. Get buy-in from senior
management. Then create a policy for shared services that maps out
the stages of the transition clearly. “Otherwise, what happens is,
it’s done in bits and pieces,” Venkataraman said. “And it becomes a
problem.”

Invest in change management. There is job
uncertainty in some pockets of the organization, while at the same
time, shared-service organization employees overseas may be
struggling to get up to speed. Companies that do not invest in
change management—which includes investing in managing complex
change in the divisions that are giving up roles and in countries
where these roles are being added—can be hurt by finger-pointing at
this stage, Venkataraman said.

Don’t bank all your savings. It’s wise to report
part of the savings, Venkataraman said, but invest some of the
savings in technology that will need to be more sophisticated as
local operations become more global.

Fix processes. Reducing the number of broken
processes that are going into shared services can save heartache
later on. Some organizations have also successfully moved work to
shared services, saved costs, and used part of the savings to fix
the process. Whatever the approach, fix the process and automate.

Design the retained organization. It is essential
to retain staff who possess domain expertise, understanding of the
business or function, and connections to key decision-makers in the
business in the relevant countries and regions, and the corporate
office. The retained organization, along with the shared service,
should enable better business outcomes.

Don’t increase the number of handoffs. As the
number of people touching a transaction increases, so does its
chance of failure. If the number of handoffs rises with
shared-services implementation, customer service will suffer.

Focus on risk management. It’s important to ensure
that a company’s shared-services implementation is not creating
increased risk exposure.

Move quickly. After a decision has been made, a
slow transition to shared services can cause a loss of momentum.

Be present. As a general rule, senior management
should be visible, face-to-face, at least once a month at the
shared-services location in the early days of the transition,
Venkataraman suggested. In-person appearances can be scaled back to
quarterly once the transition is nearly complete. A good
video-conferencing facility can help decrease the frequency of
face-to-face meetings, but in-person interaction is important.

Be patient. It may take a couple of years before
the full extent of the benefits is realized.

The full version of this article, “Ten Tips for Implementing Shared
Services,” by Ken Tysiac, is available at tinyurl.com/qj6ns86.

—Jack Hagel, editorial directorCGMA Magazine

Also at cgmamagazine.org

Companies Need to Improve Cross-Border Investigations

Many companies are not prepared to handle cross-border investigations
of matters such as fraud, corruption, misconduct, or data breaches,
and training in this delicate, culturally sensitive task is often
neglected, according to a new report.

More than 40% of 60 executives who manage their organizations’
cross-border investigations said in a KPMG global survey that their
companies lack sufficient resources to handle these investigations.
Yet, just 35% of respondents said their companies conduct
investigations training each year. Meanwhile, 95% of the respondents
said they expect their needs for cross-border investigations to
increase or stay the same over the next year.

Cross-border investigations require special care, according to KPMG,
because of cultural differences and because data privacy laws vary
between jurisdictions. Almost half (46%) of the KPMG survey
respondents said handling data privacy issues is their greatest
challenge in conducting cross-border investigations.

The full article, “How to Start a Successful Cross-Border
Investigation,” by Ken Tysiac, is available at tinyurl.com/phaqmb5.

Asia’s Big Data Problem

Asian companies are eager to embrace Big Data, but most are lagging
in implementing their ambitious plans, according to a survey by The
Economist Intelligence Unit, which surveyed more than 500 senior
executives and frontline managers in Asia Pacific.

The study, which examined why adoption of Big Data is slower than
expected in the region, found that 70% of respondents think Big Data
can deliver gains in productivity, profitability, and innovation. Yet,
more than half (58%) said they had made only limited progress in
accessing and analyzing the increasing amounts of data that are
generated and hold clues to new corporate insights and opportunities.

Information silos and a lack of communication and collaboration posed
the biggest barriers to Big Data adoption in Asia Pacific: 91% of
respondents in the survey said they encountered them.

The full article, “Asia’s Big Data Problem,” by Sabine Vollmer, is
available at tinyurl.com/pe2r3tg.

Most Productive Day? Tuesday

If you’re reading this at work on Thursday or Friday, chances are
it’s one of many distractions on your least productive days. But if
you’re reading this on a Tuesday, then you’re likely to move on
quickly and have your most productive day of the week.

The most-productive-workday question was answered in a recent survey
by staffing agency Accountemps. HR managers at U.S. companies with 20
or more employees were asked: “In your opinion, on which day of the
week are employees generally most productive?”

Tuesday was the winner, with 39% of the vote. Monday was second at
24%, and Wednesday and “no particular day” each had 14%. Thursday,
Friday, and “don’t know” were all at 3%.

The full article, “Most Productive Day for U.S. Workers? It’s
Tuesday,” by Neil Amato, is available at tinyurl.com/qd89gwc.

Visit CGMAMagazine.org

CGMA Magazine is
published in conjunction with the Chartered Global Management
Accountant designation, which was created through a partnership
between the AICPA and CIMA. The magazine offers news and feature
articles focused on elevating and emphasizing management accounting
issues.

The challenges of the new lease accounting standard have been pervasive to say the least. In this free, independently-written report, you'll learn effective adoption strategies as well as resources for easing the transition to the new standard.